Investors set out expectations on tackling climate change

Institutional investors have outlined their expectations on how companies should approach responding to the risks posed by climate change.

The European Investors Group on Climate Change (IIGCC), the Investors Group on Climate Change (IGCC) in Australia and New Zealand and the US-based Investor Network on Climate Risk (INCR) have produced a document which outlines seven steps investors expect companies to take to minimise the risks and maximise the opportunities presented by climate change and climate policy.

Announcing the document, the groups said the seven steps are in the areas of governance, strategy, goals, implementation, measurement, disclosure and public policy.

The document provides a platform from which investors can monitor the performance of companies and engage with them to encourage positive steps on climate change, through moving beyond disclosure and outlining clearly the areas in which investors expect to see companies take action.

The groups said the expectations are of particular importance for companies in carbon-intensive sectors, and those who have not have adopted carbon reduction targets or a systematic approach to managing climate change risks.

Scottish Widows Investment Partnership head of sustainability Craig Mackenzie said the statement aims to ensure that companies are left in no doubt what investors expect of them on climate change.

“Leading companies have told us that systematic energy efficiency measures enable them to reduce emissions and increase profits at the same time. These guidelines spread this message, and help us identify and engage with companies which appear to be lagging behind,” Mackenzie said.

IIGCC chair Donald MacDonald added that following the steps can enable companies to both reduce the impact of climate change and seize opportunities for growth.

Recent climate change talks in Durban demonstrated a global determination at a political level to move towards a “low carbon” economy, MacDonald said.

“It is therefore more important than ever for investors and companies to ensure they are well-placed to identify and act upon climate change risks and opportunities. By providing a unified investor voice and a framework for engagement, this document will help investors and companies to achieve this.”

The statement will be formally launched tomorrow at the Investor Summit on Climate Risk & Energy Solutions, a meeting of 450 global investors at the United Nations in New York.

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